Barclays mulls an investment bank salary cut

INVESTMENT bankers are set to take another blow as Barclays considers cutting their basic salaries, joining the industry-wide flood of firms reducing pay and headcount levels.

And recruitment specialists say any Barclays staff affected will have no choice but to grit their teeth and bear it, as they have few options elsewhere in the sector.

The bank’s new chief executive Antony Jenkins has in the past spoken of his plans to rebalance the bank’s spending away from staff and towards shareholders. And analysts believe that his strong background in retail banking may lead Jenkins to cut back the investment banking arm, which was built up by his predecessor Bob Diamond.

Basic salaries make up a minority of top staff’s total pay, limiting the total savings from such a move.

Barclays’ top eight senior staff by pay received basic salaries of roughly £700,000 in 2011, as well as bonuses of between £1.23m and £4.5m and long-term incentive awards of up to £2.25m.

“I think bankers will have to bear it – in all major banks headcount is coming down and salary costs are being reduced,” said KPMG’s Klaus Woefte.

“If you are in the top two per cent in your bank a hedge fund might be interested. But for others, there are not many choices. Barclays wouldn’t be considering doing this if they were taking a big risk with their workforce.”